Understanding how much you can expect from Social Security is crucial for retirement planning. Once you know the extent of your social security checks, you can subtract them from your estimated retirement expenses to determine the amount you need to save on your own. But calculating yourself your social security benefits is not easy.
Fortunately, you do not have to. Sign up for a My Social Security account with the Social Security Administration (SSA), and it will tell you what to expect. Here are the details and the steps to follow if the expected benefits are not as high as you expected.
The My Social Security account
To open an account, you must enter basic personal information and you will need your social security number. Then you receive an SMS with a verification code for more security. Finally, you must answer personal questions that only you can know the answer: streets in which you lived, which company borrowed your mortgage, and so on.
There are many obstacles to overcome, but every effort is made to ensure that you are the only person who has access to this information. If you want to increase the security of your account, you can also request an optional upgrade code that the SSA will send to you by mail.
When you log in to your account, the estimated amount of your benefits will appear at the age of 66, ie at the age of retirement, depending on your year of birth, and your your current work history. More detailed information is available in the "Estimated Benefits" tab. Here you can see the amount of your benefits if you start taking Social Security at age 62 or if you are late until you turn 70. You will also see what you will get with disability benefits or what your family will get with survivors. benefits if you became disabled or died this year.
If you do not see any information here, it may be because you have not worked long enough to qualify for benefits. You must obtain 40 credits to qualify for social security and health insurance. This credit is set at $ 1,360 in 2019. You can earn up to four credits annually.
You can also request the replacement of social security cards and track the history of your earnings through a social security account. It's a good idea to review your earnings to see if they are accurate. Compare it with your own records and tax returns from previous years and tell the SSA if you notice a problem, which could reduce the size of your social security checks.
How to increase your social security benefits
If your benefits are not as high as you expected, there are ways to improve them. The number you see assumes that you will earn the same amount as last year, every year, until retirement. But that will probably not be the case for most people. As your income changes, so will your social security benefits.
The best way to increase your benefits is to work for at least 35 years, because your benefits are based on your average monthly salary during your 35 highest paid years. If you have not worked for at least that long, zeros will be factored into your average, which will reduce your benefits. Working for more than 35 years is useful because most people tend to earn later in their career than they did at the very beginning of their careers. The years of low income will fall and will be replaced by years of higher earnings, and your overall advantage will increase.
You can also take steps to increase your income, such as continuing promotions, obtaining an additional job or moving to a more lucrative field. You can also defer your benefits until retirement age or until you are entitled to your maximum benefit at age 70. With a My Social Security account, you can see what kind of difference can make in your monthly checks.
A realistic idea of the scope of your social security benefits in retirement will help you determine how much you need to save on your own. Creating a Social Security account only takes a few minutes and can give you an accurate measure of your position. If you register every year or every two years, you will notice the evolution of your benefits and will be able to adapt your retirement plan accordingly.